Feb. 3 (Bloomberg) -- The U.S. Securities and Exchange
Commission should deny Carlyle Group LP’s attempt to block
future shareholders from taking the company to court, three
Democratic senators said in a letter to SEC Chairman Mary
Schapiro.

Carlyle’s provision “would unlawfully deprive investors of
their ability to vindicate their statutory rights,” Sens. Al
Franken of Minnesota, Robert Menendez of New Jersey and Richard
Blumenthal of Connecticut wrote in the letter dated today,
aiming to influence the agency as it considers the Carlyle
public-offering filing that could set a precedent for future
IPOs. The letter said the SEC should “maintain its longstanding
policy of opposing the inclusion of provisions requiring
mandatory arbitration of shareholder disputes.”

The Washington-based buyout firm amended a regulatory
filing last month to require future shareholders to resolve
claims against it through arbitration. The SEC, which blocked an
initial public offering with a similar arbitration clause in the
late 1980s, is deciding whether to allow Carlyle’s offering to
proceed. Doing so would ban investors in Carlyle and any future
company that follows in its path from taking disputes to court.

Christopher Ullman, a spokesman for Carlyle, declined
comment on the letter.

“Carlyle’s blatant attempt to skirt accountability runs
counter to the SEC’s mission of protecting and advocating for
the rights of investors,” said Gary M. Paul, president of
trial-lawyer group the American Association for Justice, in a
statement yesterday.